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Many
plaintiffs in the Exxon Valdez oil spill litigation were disappointed by the
Supreme Court’s recent decision reducing punitive damages to 507-point-5
million dollars, or one-tenth of the original jury award. But while the amount
won’t be what many were expecting or hoping for, financial planners say there’s
still a need to start thinking about what to do with the settlement money that
should be coming in soon.
John
Peterson is a financial advisor with Merrill Lynch in Anchorage. He was at a
recent meeting with plaintiffs in Kodiak, urging them to think about the
potential effects of the Exxon settlement on their pocketbooks.
(EVOS
Planning 1 :21s “…if
you plan ahead.”)
It’s
estimated that if the decision includes about 488-million dollars in interest
that’s accrued on the settlement over the years, then plaintiffs stand to split
about 628-million dollars. That’s after lawyers’ fees and other deductions,
including 107-million dollars that Exxon will get back because of a deal with a
group of Seattle fish processors known as the Seattle Seven.
Before the Supreme Court’s
decision, financial planners were urging plaintiffs to set aside about 30
percent of their settlement for tax purposes. Peterson says he’s still
encouraging the people that he advises to do that, even with the reduced award.
(EVOS
Planning 2 :10s “…planning
well with it.”)
Deedie
Pearson is a plaintiff in the case. She also works with the Oiled Regions of
Alaska Foundation, which was set up to help people in the spill areas
contribute some of their settlement money to charities. One benefit of that,
besides the social one, is that it reduces plaintiffs’ tax liability. Although
she’s disappointed in the Supreme Court’s decision, Pearson says there’s still
an opportunity to give back for those who are willing.
(EVOS
Planning 3 :28s “…little
bit that we get back.”)
A number of
plaintiffs are still lobbying Congress to pass legislation sponsored by Alaska
Senator Lisa Murkowski that would provide tax breaks and income averaging for
those involved in the litigation.
Lawyers in the case say they’re
hopeful that it will be resolved before the end of the year. But there’s still
a possibility that Exxon may try to appeal a finding made by one of the lower
courts when the case is remitted back to them.
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